Breaking

European Stocks Are Little Changed After Italian Election

A financial trader uses a telephone as he monitors data on his computer screens in front of a display of the DAX Index curve at the Frankfurt Stock Exchange in Frankfurt. Photographer: Ralph Orlowski/Bloomberg

Feb. 25 (Bloomberg) -- European stocks closed little
changed as investors scrutinized post-election polls for signs
of who will control Italy’s government.

Pearson Plc dropped the most since July as the publisher of
the Financial Times newspaper predicted operating profit will
stagnate in 2013. Reckitt Benckiser Group Plc slid 3 percent
after U.S. regulators gave rivals approval to produce generic
versions of its Suboxone heroin-dependency treatment. Deutsche
Boerse AG jumped the most in nearly eight months as CME Group
Inc. was said to have approached the exchange over merger talks.

The Stoxx Europe 600 Index decreased less than 0.1 percent
to 288.40 at the close of trading. The gauge earlier rallied as
much as 0.7 percent and declined 0.6 percent amid conflicting
projections of whether former Italian Prime Minister Silvio
Berlusconi, who has pledged to roll back austerity measures,
would be able to block Pier Luigi Bersani from forming a
government. Italian prime ministers require control of both
houses of parliament.

“The more the results come in, the more the fear grows
that Italy will become ungovernable,” said John Plassard, vice
president at Mirabaud Securities LLP in Geneva, which oversees
about $28 billion. “Investors are concerned about Italy’s
improvements if Berlusconi should win, as one can’t forget that
he’s not pro-European and could stop or delay the ongoing
reforms. The last thing we need for the euro area would be
renewed political instability in Italy.”

Italian Election

Italy may be left with a hung parliament after today’s
election. Berlusconi may have won the Senate race in the key
swing regions of Sicily, Campania and Lombardy, according to an
IPR projection based on partial vote counts released by polling
stations. That contrasts with an instant poll published earlier
by SkyTG24 Tecne that gave Sicily and Campania and a possible
majority in the Senate to Bersani. The SkyTG24 Tecne poll said
Lombardy was too close to call.

The Stoxx 600 is still on course for a ninth month of
gains, the longest winning streak since 1997, as U.S. lawmakers
agreed on a compromise budget and European Central Bank
President Mario Draghi pledged to defend the euro. The gauge has
risen 0.4 percent in February.

Volume Rises

The volume of shares changing hands in Stoxx 600 companies
was 17 percent greater than the 30-day average, data compiled by
Bloomberg show.

Euro-region stocks are missing this year’s global rally as
the correlation between the Euro Stoxx 50 Index and the MSCI
All-Country World Index of 45 developed and emerging markets has
fallen to 77 percent. That’s the lowest level since the collapse
of Lehman Brothers Holdings Inc. in 2008, according to data
compiled by Bloomberg.

Pearson retreated 3.7 percent to 1,171 pence, the biggest
drop since July 27, after saying it expects tough market
conditions to continue this year. The company forecast 2013
operating profit will be in line with 2012, when earnings fell.

Reckitt Benckiser slid 135 pence to 4,381 pence, the
biggest drop since May, after saying two unnamed manufacturers
received approval from the U.S. Food and Drug Administration to
produce generic Suboxone tablets in the world’s largest economy.

The drug faces generic competition after losing U.S. patent
protection in 2009, which Reckitt Benckiser has said would
eliminate as much as 90 percent of tablet revenue and about 20
percent of the film-strip version.

Deutsche Boerse

Deutsche Boerse jumped 5.6 percent to 49.30 euros, the
biggest gain since June 29. CME has approached the Frankfurt-based exchange to consider starting merger talks, according to
four people familiar with the situation who asked not to be
identified as the information is private.

Frank Herkenhoff, a spokesman for Deutsche Boerse in
Frankfurt, and Allan Schoenberg, a spokesman for CME in London,
declined to comment.

Elan Corp. surged 6.9 percent to 8.52 euros, the highest
price in more than three months. RP Management LLC, an investor
in royalty streams from pharmaceuticals, said it’s willing to
buy the Irish drugmaker for about $6.5 billion.

PostNL Gains

PostNL advanced 6.6 percent to 1.97 euros, the biggest
advance since Jan. 21, after reporting fourth-quarter earnings
before interest and taxes of 219 million euros ($290 million).
That beat the 144 million-euro average analyst forecast in a
Bloomberg survey.

BP Plc gained 1.6 percent to 451.2 pence as a U.S. trial
over the 2010 Gulf of Mexico oil spill began today. The U.S. and
Gulf states are considering a $16 billion accord with BP over
pollution fines and natural-resource damages claims, the Wall
Street Journal reported on Feb. 22, citing unidentified people
familiar with the matter.

Scott Dean, a spokesman for BP, declined to comment, as did
Joy Patterson, a spokeswoman for Alabama Attorney General Luther
Strange, and Amanda Larkins, spokeswoman for Louisiana Attorney
General Buddy Caldwell.